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For options/volatility traders, the best time to trade volatile events may be the week or two...

For options/volatility traders, the best time to trade volatile events may be the week or two before and after their occurrences, writes Bill Lubby. FOMC meetings are a good example, the VIX rising 2.4% on average in the 6 days prior, and then rising again in the 2-9 days following.
Comments (9)
  • dgrinb
    , contributor
    Comments (3) | Send Message
     
    TVIX is highly unpredictable...it's impossible to trade it...IMO
    10 Jul 2012, 02:58 PM Reply Like
  • eyal030
    , contributor
    Comments (2) | Send Message
     
    For several days just drops, and nothing changes,Something very strange.......
    10 Jul 2012, 03:30 PM Reply Like
  • Advill
    , contributor
    Comments (2178) | Send Message
     
    perhaps is the weirdest and wildest paper in the category, is designed to lose money if you buy and hold it for long (Credit Suisse dixit), if you are in the right moment ...oh boy! , but is not following rules.
    10 Jul 2012, 06:27 PM Reply Like
  • hx88
    , contributor
    Comments (115) | Send Message
     
    can someone explain why vix is so low given so many uncertainties - eu debts, us lack of growth, china's hard landing? shouldn't it in mid-25 already? yesterday and last friday, vix fell when the markets were down.
    10 Jul 2012, 07:01 PM Reply Like
  • Mark Bruns
    , contributor
    Comments (38) | Send Message
     
    I dunno ... my opinion [basically a wild intuitive guess, in this case] ... is that the market is pricing in a Bernanke put ... in essence, it views the extra QE from the Fed as putting heavy downward pressure on volatility ... that doesn't seem adequate ... perhaps someone can add some insight.

     

    I'll admit that I'm not entirely sold on that view ... for all of the reason hx88 mentions [and maybe more] ... the underlying weakness prompting the Fed's is SEVERE ... not just the Fed, but all central banks‬ driving rates toward zero pushes the yield curve‬ toward becoming the yield-less flat line [and who is really sure about what locks up as parts of it go negative] ... there's also still the potential for a minor seismic event associated with the surprises/re-adjustments that might come out of the LIBOR [and other rates] being manipulated.

     

    I do NOT mean to imply that someone should be in "sky is falling mode" and backing up the truck to load up on vol ... all I'm saying is that I think we are in brand new territory.
    12 Jul 2012, 03:04 PM Reply Like
  • azblackbird
    , contributor
    Comments (358) | Send Message
     
    Not enough fear and not enough volume in the markets to really make the VIX move. I'm in at $5 and will be getting out at $8 unless we get one helluva scare.
    10 Jul 2012, 07:28 PM Reply Like
  • dgrinb
    , contributor
    Comments (3) | Send Message
     
    It was designed to follow volatility on S&P500. When the volatility started at the end of the winter rally, I have entered on the lowest point, held it thru volatility period...and lost money :) Poorly designed product, doesn't follow it's own rules...There was an article some time ago about it in yahoo finance: A Warning to Investors: Don’t Get TVIX’ed! Says Macke..google it up.
    11 Jul 2012, 12:30 AM Reply Like
  • maxh
    , contributor
    Comment (1) | Send Message
     
    For those of you 'options traders' who choose to advocate a bullish stance or be a VXX hopeful, I wonder if your motives for posting (as I also wonder about Mr. Bill Lubby if your well-thought comments are simply a diversion? I'm no pro here, and I don't claim to be anything other than a dude that understands just the basics of options. However, when I keep reading the feedback and posts, I can't help but wonder if any of you see 'the obvious' way to play this VXX? I'm not saying I know anything, but when it comes to a simple option bet on this indice- it is nice to milk a cow...and know you can keep doing it with a very simple play. Keep up the work Bill!
    11 Jul 2012, 01:40 AM Reply Like
  • glssmrbl
    , contributor
    Comments (317) | Send Message
     
    It looks like the VXX is back on if it can close today marking it's third-straight day of normal activity.
    24 Jul 2012, 12:47 PM Reply Like
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